I know that each of Berkshire’s subsidiaries is said to be run without guidance from Warren.
But from time to time, I wonder how much Berkshire or at least Berkshire Energy spends on lobbying elected officials at all levels of government.
Would that type of expense be included in advertising? Do you think that WEB has a rough idea about how much all of the subsidiaries in total spend on lobbying?
(One hopes that info is not in Trump’s boxes of paper that were taken from his home, nor on Biden’s or Weiner’s laptop…)
Call me naive but I would imagine the lobbying budget is not extraordinary. We need the government support, subsidies and reasonable regulators and they need our know how, deep pockets and get it done work ethic with no fear of huge energy projects that benefit society. WEB and BRK have earned a high level of deserved trust over 60 years with model behavior, and I see their interests aligned quite well. The loyalty and quality relationships he, Charlie and even his father have developed with politicians is probably underestimated imo.
If less money is spent on R&D than is spent on lobbying and contributions to political campaigns, then the Chinese will totally out innovate the US and take over big sectors of the US economy sooner than I imagined.
Just because something is legal or works short term, does not mean thst it is smart.
Innovation is smart for the future, greasing palms is wasteful.
IMHO.
No agenda… just wondering about the logic of it all, not only for companies but for whatever is left of good government in the US.
MONEY TALKS short term. Innovation dominates. China takes the long view and is more strategic.
Your chart of lobbying, does it include corporate donations to campaigns?
That pie chart makes sense in the context of the category definition.
First, capital: How the category ‘Capital’ is defined is more around what the organization invests in itself to improve and grow itself. Anyone working in a small company which grows into a large company can attest to the stupidly large sums of money and efforts needed to kill, convert, and improve processes / systems. Large companies also spend money acquiring innovation since innovation is difficult-to-impossible in large companies by definition.
Second, R&D: it shouldn’t be a surprise most companies, on average, don’t spend much on R&D. Take Fastenal, a bolt is a bolt and a nut is a nut. It’s been that way for awhile. They have true innovation in their point of distribution but their scaling and efficiency of delivery is what sets them apart (capital spend category). A lot of companies don’t need much if any innovation to be successful businesses for customers and shareholders.
Lastly, regulation & lobbying: some sectors of innovation are highly regulated, think of medical, pharmaceutical, or aerospace. This is for a very good reason, it doesn’t take many planes falling out of the sky to bring a world of regulatory hurt on a company. The drawbacks are real - new entrants are far and few inbetween. Very few individuals have the ability to will new profitable business models into existence which disrupt many different rent seeking industries like Elon Musk does. There’s a balance in here between regulation, lobbying, and innovation but I’m not smart enough to know where we are on the spectrum or if it’s too much. I think a leveling of regulatory enforcement actions would be helpful - for example, people were extradited and are in prison for Volkswagen’s diesel scandal yet no one went to prison for the 737 malfeasance at Boeing; one of the two examples resulted in a nontrivial sum of dead people.
As far as Berkshire goes - it seems impossible Berkshire couldn’t spend significant sums on lobbying. Berkshire does everything everywhere. It’s impossible for every politician and bureaucrat to know the intricate details of what Berkshire does and needs so lobbying is a great way to get access and influence law. I’m not sure what a good alternative would look like in this case.
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